Highlights

Total production of rapeseed in MY 2017/18 is forecast to increase by 13 percent to 290,000 MT in comparison to MY 2016/2017. Rapeseed planted area in MY 2017/2018 is expected to increase by three percent in comparison to the previous year and amount to 110,000 hectares. After a reduced yield of rapeseed in MY 2016/2017 caused by winterkill, production per hectare is expected to return to an average level in MY 2017/2018. Stabilization of planted area of rapeseed stems from stagnant demand for biofuel production and reduced exports of rapeseed within the European Union.

Production

MY 2016/2017

After a bumper crop and record yields of rapeseed in MY 2015/2016, the sown area of rapeseed in Latvia in MY 2016/2017 increased by almost 20 percent. The increase of planted area resulted from competitive prices of rapeseed versus wheat and stable demand for biofuel production. Due to unfavorable weather conditions in December 2015 the average yield of rapeseed decreased from 3.29 MT per hectare in MY 2015/2016 to 2.41 MT in MY 2016/2017. The lower yield of rapeseed in MY 2016/2017 also resulted from an increased share of spring rapeseed in total sown area, caused by winterkill of plantations. Implementation of EU regulation of 2013 restricting the use of neonicotinoids in rapeseed planting did not affect conditions for rapeseed development. The reduced yield did not offset higher acreage and the total crop of rapeseed in MY 2016/2017 is estimated at 255,000 MT, 13 percent less than in the previous year.

The popularity of rapeseed cultivation in Latvia is connected with use of rapeseed oil for biofuel production and export demand. In MY 2016/2017 rapeseed acreage increased in Latvia, mostly due to continuing demand for biofuel production, however, there is more and more uncertainty connected with changes in EU biofuel policy and competition from more profitable grain production. Growing demand for export of rapeseed and the continuing National Indicative Target (NIT) for biofuel use are expected to stimulate production in MY 2017/2018.

MY 2017/2018

It is estimated that the area planted for rapeseed in MY 2017/2018 will amount to 110,000 hectares, a three percent increase in comparison to the previous year due to continuing demand for biofuel production and import demand from other EU member states. It is expected that the sudden drop of temperatures in December 2016 and lack of sufficient snow cover will adversely affect rapeseed production in MY2017/2018 and stimulate an increase of spring rapeseed acreage. Official information about the extent of losses is not available yet. Latvian’s total production of rapeseed in MY 2017/2018 is forecast to increase by 13 percent in comparison to MY 2016/2017 and amount to 290,000 MT. The increase of production stems from higher yields which are expected to return to average levels after a drop of production per hectare in MY 2015/2016.

Utilization

Rapeseed oil

It is estimated that in MY 2016/2017 the rapeseed crush will amount to 100,000 MT and will be at the previous year’s level. Rapeseed crush is determined by demand for oil for food consumption and the use of rapeseed oil for production of biodiesel, the primary biofuel produced in Latvia. Production and consumption of rapeseed oil for food consumption remains almost constant while demand for rapeseed oil for biofuel production depends on the Latvian National Indicative Target (NIT) for biodiesel use. In MY 2016/2017 industrial use of rapeseed oil for biodiesel is expected to remain stable, so rapeseed oil output is expected to remain at the previous year’s level.

In MY 2016/2017 output of rapeseed meal (a residual product in production of rapeseed oil) is estimated to remain stable in comparison to MY 2015/2016. Feed use of rapeseed meal on MY 2016/2017 is estimated to grow because of higher demand from the poultry and dairy industries. Soybean meal is the primary protein feed used in livestock nutrition. Almost the entire demand for soybean meal has to be supplied by imports. It is estimated that in MY 2016/2017 the demand for soybean meal will increase by 2 percent due to higher use of protein feeds by the growing poultry industry.

Trade

Rapeseed

In MY 2015/2016 Latvia exported 245,000 MT of rapeseed. All exports were destined for the European Union. Germany, Belgium and the Netherlands were the main export destinations. In the first six months of the MY 2016/2017 (July-December) Latvia exported 206,000 MT of rapeseed, eight percent more than for the same period in 2015. In MY 2015/2016 Latvia imported 65,000 MT of rapeseed, mainly from Lithuania. In MY 2016/17 rapeseed imports are expected to grow in comparison to the previous year’s level due to demand for production of biofuels.

Rapeseed oil

In MY 2015/2016 Latvia exported 14,000 MT of rapeseed oil. All exports were destined for the European Union, with Lithuania the main destination. In the first six months of the MY 2016/2017 (July-December) Latvia exported 6,000 MT of rapeseed, six percent more than in the same period of 2015.

In MY 2015/2016 Latvia imported 43,000 MT of rapeseed oil mainly from Russia and Estonia. In MY 2016/2017 rapeseed oil imports are forecast to decrease in comparison to the previous year’s level. The biggest share of imports comes from Russia because of proximity of the market and competitive prices. In the first six months of the MY 2016/2017 (July-December) Latvia imported 17,000 MT of rapeseed oil, 42 percent less than in the comparable period of 2015.

Protein meals

Rapeseed meal

In MY 2015/2016 Latvia exported 52,000 MT of rapeseed meal, eight percent more than the previous year. All exports were destined for the European Union. Rapeseed meal is in demand in Europe because it is partially used as a protein source in swine and cattle feeding rations. Norway is the main export destination for exports of rapeseed meal. In the first six months of the MY 2016/2017 (July-December) Latvia exported 27,000 MT of rapeseed, seven percent more than in the same period of 2015 due to higher demand from Norway.

In MY 2015/2016 Latvia imported 20,000 MT of rapeseed meal mainly from Lithuania and Ukraine. In the first six months of the MY 2016/2017 (July-December) Latvia imported 9,000 MT of rapeseed meal, 25 percent less than in the same period of 2015.

Soybean meal

In MY 2015/2016 Latvia imported 107,000 MT of soybean meal, 18 percent less than in the previous year. The decrease of imports stems mainly reduced demand from swine industry which is in decline due to an outbreak of African Swine Fever. Most of soybean meal was imported from Luxembourg, Lithuania, Argentina and the Netherlands. The value of imports of soybean meal was over U.S. $43 million. In MY 2015/2016 Latvia did not import soybean meal from the United States. Soybean meal remains in demand because it is a major protein source in poultry feeding rations. It is expected that in MY 2016/2017 imports of soybean meal will continue to decline due to lower demand from swine industry.